- IATO has asked the Maldives to delay collecting 17% TGST from unregistered foreign tour operators for one year.
- IATO President Ravi Gosain warned the tax would raise holiday package costs and cited concerns over extraterritorial enforcement and inadequate consultation.
- India is the Maldives' sixth-largest source market with 90,706 visitors, and European, UK, and Russian bodies have also opposed the rule.
The Indian Association of Tour Operators (IATO) has urged the Maldivian government to delay the collection of Tourism Goods and Services Tax (TGST) from unregistered overseas tour operators, travel agents, and online booking platforms for one year.
The appeal follows recent tax law amendments introduced in late August, which instruct foreign agents selling Maldivian resort and guesthouse bookings to pay a 17 per cent TGST. Under the new measures, resort operators and guesthouses must report all transaction details involving foreign agents to the Maldives Inland Revenue Authority (MIRA), which has launched a campaign to register these external entities.
In a letter sent to Maldivian Tourism Minister Mohamed Ameen last month, IATO President Ravi Gosain voiced serious concerns over the economic fallout of the tax policy. Gosain warned that imposing additional taxes during a period of tight profit margins across the global supply chain would inevitably drive up the cost of holiday packages to the Maldives.
The association, which represents more than 2,000 travel businesses, noted that Maldivian authorities introduced the measures without adequate consultation with foreign stakeholders. It highlighted concerns regarding extraterritorial legal enforcement, practical administrative hurdles, and potential disruption to current bookings.
While acknowledging the Maldivian government’s right to review its fiscal policies, IATO stressed the importance of industry dialogue before implementing changes that could depress arrival numbers from primary source markets. The group requested an immediate consultation with the Ministry of Tourism and urged officials to postpone enforcement by 12 months to protect the upcoming peak holiday season.
Specific operational ambiguities remain unresolved, including whether the tax applies based on the date of booking, payment, or travel.
India remains a vital market for the Maldivian tourism sector, accounting for 5.8 per cent of total arrivals this year with 90,706 visitors, making it the sixth-largest source market. Comparable industry bodies across Europe, the United Kingdom, and Russia have also voiced opposition to the rule, calling on the government to revise its approach.
